Verizon Wins Bidding War for Straight Path Communications -- Update

Verizon Communications Inc. will buy Straight Path Communications Inc. for about $3.1 billion, after beating rival AT&T Inc. in an unusually intense bidding war for the wireless-spectrum holder.

Straight Path holds licenses to use high-frequency radio waves that some engineers think could form the backbone of next-generation networks. The Wall Street Journal first reported news of the new deal Wednesday night.

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Verizon will pay $184.00 a share in Verizon stock for the company.

AT&T reached a deal with the company last month to buy Straight Path for $1.6 billion in stock, including liabilities. But the agreement set off a bidding war with a telecom rival that the companies declined to identify but people familiar with the matter said was Verizon. Verizon agreed to pay $3.1 billion in stock for the company, an offer that AT&T has declined to match, Straight Path said. Verizon will pay on behalf of Straight Path a termination fee of $38 million to AT&T.

Straight Path, which had just nine employees as of October, was worth about $400 million two months ago. The Glen Allen, Va., company acquired most of its wireless spectrum more than 15 years ago but was penalized this year by regulators for failing to build a working network.

Shares of Straight Path closed Wednesday at $223.79 on the New York Stock Exchange, well above the $184-a-share takeover offer. The shares were trading around $35 in March.

--Austen Hufford contributed to this article.

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Write to Thomas Gryta at thomas.gryta@wsj.com and Drew FitzGerald at andrew.fitzgerald@wsj.com